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The difficult task of avoiding platinum industry job cuts

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Thursday, 17 August 2017 11:34

Financial Mail writes that platinum mining companies are having to take painful decisions to make operations resilient in the face of low prices, regulatory uncertainty, labour and community protests and an unclear demand outlook.

While the industry’s three biggest platinum miners — Amplats, Impala Platinum and Sibanye Gold — are holding their heads above water, some of the smaller producers, such as Atlatsa at its Bokoni mine, Platinum Group Metals at Maseve and Royal Bafokeng Platinum at Bafokeng Rasimone Platinum Mine recently announced they would have to restructure operations and retrench staff. Kagiso Asset Management’s Abdul Davids says there are likely to be more retrenchments in the industry as persistently low platinum group metals (PGM) prices and high operating cost inflation (especially wage growth) mean 70% of the industry is loss making. The labour-intensive mines are under the highest pressure and there is an increasing profitability gap between them and the lower-cost mechanised mines, which have actually done well operationally. Lonmin CEO Ben Magara refused to be drawn on whether that company’s restructuring would involve job cuts. Meantime, labour relations seem to have stabilised compared with 2012 and 2014. But, platinum mines experience more community protests than other mining companies because they are located in the poorest parts of SA — the former homelands — where unemployment and poverty are rife.

Read this in-depth article by Charlotte Mathews in full at Financial Mail

Read too, Why the platinum industry is in a worse place five years after Marikana, at Financial Mail (paywall access)